Lesotho Times

New twist to M500m project saga

By Billy Ntaote

MASERU — Seventeen subcontractors in a M568 million joint venture originally enlisted to build 101 health centres but which is now under provisional liquidation have petitioned the High Court in a seemingly desperate attempt to rescue the project and gain some value out of it.

Trencon Building World Belela Joint Venture (TBWB-JV) was awarded a M568 million contract to build 101 health centres across Lesotho on September 30, 2010.

But TBWB-JV was placed under provisional liquidation after Anju Civils (PTY) Limited petitioned the High Court on May 30 2013 alleging that the joint venture was insolvent and had for many months failed to pay debts. The debts were far in excess of the value of its assets, it was alleged. The commercial court division of the High Court granted the provisional liquidation order.

Because of the provisional liquidation, TBWB-JV then lost management control of the lucrative contract to build the health centres . The M568 million contract was bankrolled by the Millennium Challenge Account-Lesotho (MCA).

As creditors of the joint venture (TBWB-JV), the 17 subcontractors have now  approached the High Court’s Commercial Court Division seeking to be granted permission to intervene in the provisional liquidation arrangement that TBWB-JV was placed under.

The 17 applicants are seeking permission to intervene and protect the interests of TBWB-JV— cited as the second respondent in the petition. They allege the provisional sequestration was sought in an “irregular manner”.

The 17 creditors, represented by Advocate Kuili Ndebele will appear before the court on December 18, seeking to be granted an interim relief to intervene in the provisional sequestration.

A MCT holding (PTY) LTD is cited as the first applicant together with 16 others.

According to a certificate of urgency by Advocate Christiaan Serfontein Edeling representing Anju Civils, TBWB-JV was at the time of the petition to the court likely to receive, as per an amended contract with the MCA, “an amount of many millions that will shortly be paid” to it.

Edeling had said: “It is furthermore likely that the first respondent will be selective in deciding which creditors to pay and that those regarded as most urgent will be paid whilst the others will not be paid.

“It is urgent to sequestrate the first respondent before such payment can be made, to ensure that the funds in question will remain available to be dealt with according to law and distributed in a fair and awful manner to all creditors.”

Anju Civils is now cited as the first respondent in the 17 subcontractors petition while Trencon Building World Belela Joint Venture is cited as the second respondent.

Following Anju Civils petition, the TBWB-JV was placed under provisional liquidation and four trustees were appointed to continue control of its estate by the office of the Master of the High Court.

The four trustees — St Cooper, MT Matsau, DG Roberts, M Tau-Thabane — now cited as third to sixth respondent in the 17 applicants petition, were directed by the court to complete the health centres project on July 11.

Five companies were subcontracted to finish off the project, namely: LSP Construction (PTY) LTD, Ruwacon (PTY) LTD, Brix Development Company (PTY) LTD, N.M. Khojane Construction Pty (Ltd) and Sigma Construction (PTY) LTD.

The five companies were contracted at the cost of M259 million on July 9 to work towards a completion dateline of November 30.

The companies are now included in the petition by the 17 creditors of the TBWB-JV and are cited as 14 to 18 respondents.

In the petition, the seventh and eighth respondents are Trencon Construction (PTY) LTD and Building World (PTY) LTD.

The MCA Lesotho, Millennium Challenge Corporation (MCC), the Government of Lesotho, the Master of the High Court and Attorney General are cited as ninth to thirteenth respondents in the application by the 17 creditors.

The subcontractors want the court to order that demands for payments by the MCA on October 8 and 19, 2013 be declared irregular, stayed and suspended pending the determination of their application.

The 17 subcontractors seek the decision of the Master of the High Court, dated June 11, 2013, to accept and impose as conditions to joint venture, directives given to it by the MCA be reviewed and set aside and be declared null and void without any force and effect.

TBWB-JV’s subcontractors want the court to also declare that MCA had no powers whatsoever to appoint five new companies as sub-contractors of the joint venture while under provisional sequestration.

Subcontractors also petition the court to declare that the instruction of MCA of July 8, 2013, directing the trustees (St Cooper, Matsau, Roberts and Tau-Thabane) to appoint the five companies as subcontractors of the TBWB-JV as illegal.

The applicants also want the court to declare subcontracts agreements entered into by the joint venture while under provisional sequestration with the five subcontract companies as unlawful.

Subcontractors want the court to also declare the five companies were not and still are not entitled to receive any benefit either as a payment and or profit out of the unlawful subcontracts.

In addition, they also want the five companies to be directed to refund and pay the TBWB-JV all payments either as profits or benefits gained pursuant to the unlawful subcontracts.

The 17 creditors also want the Anju Civils to be held liable for all the damages they suffered together with the TBWB-JV as a result of the vexatious petition against the joint venture in the event that the court dismisses the sequestration application.

They seek the court to direct Anju Civils to pay cash security for costs and damages of M100 million before the hearing of the sequestration petition instituted against TBWB-JV.

Applicants also want trustees to be interdicted and restrained from using offices, assets, human resources and anything that belongs to the TBWB-JV and general body of creditors for the benefit of MCA, MCC, government of Lesotho and the five construction companies pending the outcome of the application and alternatively the sequestration.

The applicants also want trustees to be directed to keep and preserve all the assets of the joint venture pending the outcome of their application and alternatively pending outcome of the sequestration petition.

They also seek trustees to be directed to give a full account supported by audited financial statements showing how the funds of the TBWB-JV have been used after the provisional sequestration.

They also seek the trustees to be directed to provide them as applicants with detailed inventory of all on site construction materials the value of which to the petition is M17 million.

Applicants also want the TBWB-JV trustees to be directed to provide to them a detailed inventory of all the assets of the joint venture which, according to their petition, are worth M15 million.

The applicants also seek the Anju Civils, trustees, MCA, MCC and the government of Lesotho be held liable for loss suffered in the event that there are any missing assets. They also seek the trustees to be removed as provisional trustees for failure to execute their duties and the master be directed to appoint any fit person to substitute the said trustees.

The applicants also want Anju Civils, trustees, MCA, MCC and the government of Lesotho to be held liable for any and all liabilities that have accrued against the joint venture post provisional sequestration and that they be held jointly and severely liable.

The petitioners also want the sequestration application against the joint venture dismissed with costs.

Lesotho Times

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